Pay for play: Judge set to hear case that could transform college sports

Forward Ed O'Bannon of the UCLA Bruins moves the ball during a game against the USC Trojans.

A federal judge in California heard arguments Thursday on whether thousands of current and former athletes can join a lawsuit that could upend the multi-billion-dollar business of college sports.

Ed O’Bannon, a power forward for the UCLA basketball team in the mid-1990s, is among those suing to force the NCAA to share the revenue from its lucrative television and video-game contracts with players — perhaps as much as 50-50.

The judge, Claudia Wilken of U.S. District Court, heard arguments on whether the lawsuit deserves class-action status. She ordered O'Bannon's attorneys to amend some legal technicalities in the lawsuit, including determining whether current players should be added to the suit.

O'Bannon lawyer Michael Hausfeld said he plans to file a new lawsuit that includes current players, but will attempt to keep their names confidential.

NCAA lawyer Greg Curtner argued that a class action suit would be inappropriate because the athletes are too different to be considered the same. Star athletes generate more revenue than average players, and therefore have different legal stakes.

If that happens, legal observers have said, the NCAA might pursue a settlement and set up a fund to pay current and former players. Or it could take the case to a jury trial next year, exposing it to billions of dollars in potential liability.

Michael McCann, director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law, told NBC News that the stakes for the NCAA are huge.

“It would be changing college sports from a model where players have been limited in terms of compensation — room and board and tuition — to something much bigger than that,” he said.

Potential payment for athletes would have a flip side, he said — less revenue for the NCAA, its conferences and schools themselves, potentially forcing them to rethink scholarships and budgets for all their sports.

Student-athletes in major college sports are unpaid and sign an agreement that grants the NCAA the right to use their likenesses for commercial purposes. O’Bannon’s suit argues in part that the setup unfairly stops players from selling the rights themselves.

“The NCAA is not exploiting current or former student-athletes but instead provides enormous benefit to them and to the public,” it said in a statement in March. “This case has always been wrong — wrong on the facts and wrong on the law.”

The original suit, filed in 2009, focused on the use of player likenesses in EA Sports video games. The judge in January allowed the plaintiffs to pursue a cut of the television money, too.

That expanded the case dramatically. For the rights to televise its March Madness basketball tournament alone, CBS Sports and Turner Broadcasting will pay the NCAA almost $11 billion from 2011 through 2024. The NCAA also receives huge payments for college football broadcasting rights.

The NCAA has said that the plaintiffs’ suggestion that it reaps a “financial bonanza” from TV deals is false, and that it doesn’t force anyone to sign away their likenesses.

“Individual student-athletes are free to participate or not,” the association said in a summary of its argument against class-action status. “If they do choose to participate in the broadcast, they consent, just as the coaches, cheerleaders, band members, and referees do.”

O’Bannon’s cause has attracted high-profile backers, including NBA legends Oscar Robertson and Bill Russell, who were collegiate standouts before their pro success. Former Nebraska and Arizona State quarterback Sam Keller is the original plaintiff.

McCann, who wrote a lengthy primer on the case for the website of Sports Illustrated, has compared O'Bannon to Curt Flood, who four decades ago challenged Major League Baseball’s reserve clause, which tied players to their teams for life.

Flood lost his case at the Supreme Court in 1972, but he was vindicated three years later, when an arbitrator’s ruling paved the way for the modern system of free agency, changing the sport forever and enabling today’s mega-million contracts.

“It takes courage, regardless of the merits of their claim, to take on a system, an institution,” McCann said.

O’Bannon, who now works at a Toyota dealership outside Las Vegas, did not immediately return a call Thursday from NBC News. He told The Associated Press earlier this year that he filed the suit because the system wasn’t working.

“Everybody’s getting paid except the players,” he said. “It’s not fair, and it needs to change.”